LIC chairman MR Kumar said that the company’s management will soon meet the top management of the Adani Group and seek a better understanding of the crisis.
In an exclusive interview with Business Today TV Managing Editor, Siddharth Zarabi, Kumar said LIC will get in touch with the Adani Group in the next 7 to 10 days to take an overview of the whole Adani-Hindenburg issue.
“The company will soon contact the Adani group’s top management to get a better understanding of the whole issue surrounding the recent events. In a week or 10 days, our investment team and other officials will be meeting them and discussing the future plans for the situation,” Kumar said on Friday.
The port-to-power conglomerate has been under fire since US-based short seller Hindenburg Research accused the Gautam Adani-led group of stock manipulation, running offshore shell companies for round-tripping, and misusing corporate governance practices.
Since the report was made public, LIC’s exposure to Adani group firms’ stock has come under scrutiny. The issue has also rocked the parliament after the Opposition parties claimed that LIC and SBI’s “overexposure in Adani group stocks” is a major scam.
Talking about risks around the Adani Group stocks, Kumar assured that policyholders and shareholders’ invested money is safe. “I would like to tell the shareholders and policyholders that there is nothing to worry. There is not even 1 per cent risk for the policyholders, shareholders. There will be no impact on the investments as such whatsoever. We will see that this issue is taken care of. This is not such a big thing. It is just a drop in the ocean,” said Kumar in the exclusive chat with BT TV.
A week after the Hindenburg report was published, which led to a massive sell-off of Adani Group shares in the stock market, LIC issued a statement and clarified that the state insurer has invested over Rs 36,000 crore in Adani Group companies.
The total purchase value of equity, purchased over the last many years, under all the Adani Group companies was over Rs 36,000 crore and the market value as on January 27 was Rs 56,142 crore.
On Thursday, LIC in its Q3 results reported a multi-fold surge in net profit at Rs 6,334 crore for the quarter that ended December 31, 2022, as against Rs 235 crore in the year-ago period.
The government-owned insurer said it recognised a gain due to changes in its accounting policy. The insurer’s net premium income increased 15 per cent to Rs 1.1 lakh crore in Q3FY23 as compared to Rs 97,620 crore in Q3FY22.
The insurer, which is largely reliant on an army of agents, said policies sold in the nine months ended Dec. 31 rose nearly 2 per cent year-on-year to 12.9 million. Its solvency ratio, the measure of an insurer’s ability to meet its long-term debt obligations, rose to 1.85 from 1.77 a year earlier.
The company’s gross value of new business (VNB), which measures expected profit from new premiums and is a key gauge for future growth, stood at Rs 7,187 crore, while VNB margins came in at 19.1 per cent.